EU leaders poised to agree on Palestinian aid plan

EU leaders were today poised to endorse a plan to resume aid payments to cash-starved Palestinians focusing on health, social services and utilities such as heating and sanitation, while maintaining a funding freeze on the Hamas-led government.

A draft statement from the EU summit in Brussels said the 25-member bloc “stands ready to contribute a substantial amount to the international mechanism”, which would channel aid to the Palestinians, but bypass Hamas.

EU officials did not immediately confirm a report in Israel’s Yediot Ahronot newspaper that the EU would allocate €120m in initial aid.

The EU has said it wants to have the funding mechanism up and running by the end of this month.

The EU statement said the plan had been drawn up in consultation with the United States, Russia and the United Nations, who agreed with the EU in May that a mechanism had to be found to keep the Palestinian economy afloat after most international aid was cut off following Hamas’ January election win.

“We have done this of course together with our partners,” said EU External Relations Commissioner Benita Ferrero-Waldner. “We have tried to find a solution with which everybody can live.”

There was no mention in the statement of the payment of salaries to Palestinian government workers – which is opposed by Israel – but it did refer to “social allowances” which EU officials said would entail payments to some public employees.

Yediot Ahronot said the fund would pay families of needy Palestinian state employees €160 a month. The daily said Ferrero-Waldner would travel to Israel on Monday to present the proposal.

The EU urged Israel to resume the transfer of more than €40m in monthly tax revenues it collected on behalf of the Palestinians.

Those funds are “essential in averting a crisis in the Palestinian territories”, the draft EU statement said.

Israel blocked those funds after the Hamas election victory. The EU, the US and other donors also froze hundreds of millions of pounds in direct aid to the Palestinian government after the win by Hamas, which the EU and US have branded as a terrorist organisation.

The aid freeze has meant some 165,000 government employees, including teachers, health workers and security personnel, have not been paid in three months. In its statement, the EU urged other donors, including Arab states, to “consider early and substantial contributions”.

The EU draft statement urged Israel to resume peace talks with Palestinian President Mahmoud Abbas – whose Fatah movement is Hamas’ main political rival. It urged Abbas to disarm violent groups and halt attacks on Israel.

In a message to the Israelis, the EU condemned violence against Palestinian civilians and urged a halt to “any action that threatens the viability of an agreed two-state solution and from acts that are contrary to international law”. The statement referred in particular to the construction of Israel’s West Bank security barrier and Jewish settlements in the area.

Referring to Israeli Prime Minister Ehud Olmert’s determination to draw Israel’s final borders by 2010 – with or without an agreement with the Palestinians – the EU insisted it “will not recognise any change to the pre-1967 border other than those agreed by both sides.”